ChargePoint (CHPT) operates a multi-national network of electric vehicle (EV) charging stations. I am bullish on the stock. (See Analysts’ Top Stocks on TipRanks)
If you believe in the future of the electric vehicle movement, you can certainly invest in specific automobile manufacturers.
However, that’s not the only approach you can take. Consider how these vehicle makers and their customers will all rely on the existence of charging stations.
Therefore, ChargePoint is what people in the gold mining industry might call a “picks-and-shovels” type of investment. Why bet on a miner, when you can invest in a company that makes equipment they’ll all need?
As we’ll see, ChargePoint is indeed leading the charge in vehicle electrification infrastructure – and not only on one continent.
A Quick Look at CHPT Stock
Whether you’re up or down on your CHPT stock investment, depends on when you bought it.
Folks who chased the share price at the 52-week high of nearly $50, reached back in December of 2020, aren’t doing too well at the moment.
So, there’s a lesson here about what can happen when you buy a stock after a sharp upward price move.
On the other hand, buying the dip at $18, when CHPT stock bottomed out in early October, would have yielded good results.
As of early November, ChargePoint’s share price was hovering near $25.
That’s not the rock-bottom price, but it still leaves the door open to a 2x move if CHPT revisits its 52-week high. In other words, from a technical standpoint, the risk-to-reward profile looks favorable.
Continued Leadership
While ChargePoint certainly isn’t the only charging-port play on Wall Street, it’s among the best ones and is arguably number one.
The skeptics would have something to say about this contention, but the data speaks volumes.
ChargePoint’s most recently reported quarterly results indicate total revenues of $56.1 million (all figures are unaudited). That’s a 61% increase on a year-over-year basis.
It gets even better when we drill down to ChargePoint’s networked charging revenues, which were $40.9 million in Q2 2021.
That’s quite impressive, as it represents a year-over-year increase of 91%.
Not only that, but ChargePoint remains well-capitalized with $618.5 million in cash on the company’s balance sheet.
Furthermore, there’s no reason to be pessimistic now, as ChargePoint raised its outlook for the full fiscal year ending January 31, 2022, from $195-205 million to $225-235 million.
Making Strides on Two Continents
If any business is proving that the vehicle electrification movement is global in scope, it’s ChargePoint.
As of July 31, ChargePoint’s network of activated electric vehicle ports exceeded 118,000 – and importantly, over 5,400 of them are located in Europe.
Moreover, the company recently completed its acquisition of has·to·be, an e-mobility provider with a leading European charging software platform.
With that transaction, ChargePoint stands to benefit from has·to·be’s European market share, particularly in Germany, Austria, and Switzerland.
In addition, ChargePoint acquired ViriCiti, a provider of electrification solutions for e-bus and commercial fleets.
Founded in 2012, ViriCiti now has an established market share in both North America and Europe, with around 150 fleet operators, 3,500 connected vehicles, and 2,500 networked ports under management.
Wall Street’s Take
Turning to Wall Street, Chargepoint has a Moderate Buy consensus rating, based on seven Buys, two Holds, and one Sell rating assigned in the past three months. The average Chargepoint price target is $34, implying 38.7% upside potential.
The Takeaway
There’s no denying it: the electric vehicle market is multinational, and so is ChargePoint.
It would be difficult to find an investable electric vehicle charging-port business with a faster-growing market footprint now.
The company’s financial stats are convincing, as well.
So, if you want exposure to the electric vehicle revolution, CHPT is a stock to consider.
Disclosure: At the time of publication, David Moadel did not have a position in any of the securities mentioned in this article.
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